EDC upbeat on bond issue after securing top rating

MANILA, Philippines - Energy Development Corp. (EDC), the country’s largest renewable energy company, is optimistic investors will respond positively to its upcoming bond issuance after securing an Aaa rating from PhilRatings.

“Getting the highest possible corporate credit rating affirms EDC’s good credit standing and excellent fiscal management. The rating definitely provides the necessary push to make our bonds more attractive to investors and gives us enough reason to expect a successful issuance,” EDC president and COO Richard Tantoco said.

The company applied for registration with the Securities and Exchange Commission (SEC) for bonds of up to P10 billion.

However, its Aaa rating qualifies the country’s leading geothermal firm for bonds of up to P12 billion.

PhilRatings cited EDC’s strong cash flow generation, ample liquidity and financing sources to cover maturing debt and operating requirements, reduced exposure to foreign currency risk, improving profitability, leadership in the geothermal industry, and experienced management team as the plus factors for its getting the highest possible corporate credit rating.

EDC earlier issued P9 billion fixed rate corporate notes which generated strong investor take-up.

The company’s maiden debt issue in the domestic capital markets was 2.5 times oversubscribed and was upsized from its original issue size of P3 billion.  

“We are confident our net income will stay robust given our acquisition of the Tongonan and Palinpinon geothermal plants, long-term contracts with National Power Corp., our local and overseas expansion, and the Renewable Energy Act benefits which we will take advantage of as we continue to invest in environment-friendly resources,” Tantoco said.  

EDC remains the country’s leading producer of geothermal energy accounting for 62 percent or 1,199 MW of the 1,980 MW total installed capacity.

It is now positioning itself as the premier pure renewable energy player in the Philippines with its acquisition of 60 percent equity in the Pantabangan-Masiway hydroelectric project and the development of an 86-MW wind farm in Burgos, Ilocos Norte.